The first is this Wednesday when Gordon Brown delivers his last Budget as chancellor (presumably). The other is the deadline for the Financial Services Authority’s Treating Customers Fairly initiative.
And there could be a third first if Brown was to deliver a Treating Home Owners and Borrowers Fairly Budget. What would this contain? Well, he could start by making some big changes to Stamp Duty. Mortgage Strategy has been running its Step Up Stamp Duty campaign for over two years and reform is long overdue.
Increasingly, Stamp Duty is being added to mortgage loans. It can’t be sensible to borrow to pay a tax, which is hard to justify in any case. But unfortunately for many borrowers – especially first-time buyers – it’s the only practical way to proceed.
It’s clear to everyone that Stamp Duty is not doing what it was designed to do – unless you count swelling the government’s coffers.
When it was introduced it was meant to tax the most expensive house purchases. But in 1997 the average house price was just 68,000. The government’s Department of Communities and Local Government estimated in January this year that the average house price is now 205,000. Finding a property below the lowest 125,000 Stamp Duty threshold these days is as easy as finding a nurse with an inflation-linked pay rise.
Meanwhile, via the FSA, the government will rightly push through the TCF initiative at the end of the month. It needs preparation and organisation but TCF is a laudable philosophy. Whitehall and the FSA have been right to take the stance they have.
But as Jesus warned: “Judge not lest ye be judged,” and if dear Prudence is going to continue wagging his finger at the finance industry it’s time he put his own house in order. Stamp Duty would be a start. You can’t treat people more fairly than to allow them to buy the roof over their heads.